Henderson Far East Income Share Discussion Threads

[2sporrans] 15/10/2020 12:40

The capital appreciation was decent with HFEL until about 3 years ago. I do wonder whether the bar ought to have been progressively lowered as to the 'qualifying' level of income for the shares held by HFEL. Quite apart from the pervasive crushing of yields thinning the prospect field, the balance of reward between growth and 'value' stocks has ever more favoured the former as discount rates have also been crushed. All but a few growth stocks will be screened out, rapid future divi growth notwithstanding. Wonder how big the HFEL reserves are and how much is being consumed to sustain the high payout, currently fully 7.5%. Will we ever be enlightened? Still, the HFEL portfolio is highly [net] cash generative; to be treasured in these times. And East-SE Asia looks to be best region to invest, by some margin.

[zac0_4] 09/10/2020 17:54

carpingtris - I also hold Rathbone Global Opps. Another excellent performer! My holding in Fundsmith Equity fund is directly with Fundsmith. It's my largest holding by far. I've set up an automatic withdrawal payment with them. They pay a set amount, from my capital, to me on a quarterly basis. Just like a dividend payment. In that way I haven't got the psychological barrier of having to sell units myself! To date it's worked well. I've had payments made to me equivalent to 5.8% of my initial investment and my capital is still 27% up! Another possible option for consideration. Good Luck.

[carpingtris] 09/10/2020 08:54

Thanks for the opinions - interesting. I'm looking for growth in my pot as well as reliable Divi payers 'a mixture'. My Rathbone Global Opps. and Bailie Gifford Global Income Growth have both performed well this year - but I wouldn't stick all my eggs in one basket.

[danieldruff2] 09/10/2020 08:46

I've come to a similar opinion but over the years I have found the steady state of this fund useful when the rest of the market drops. I sell 25-50% of my HFEL, invest in bombed out stocks, then top it up again. Has worked well.

[zac0_4] 08/10/2020 23:11

carpingtris - the >5% dividend does look attractive. But the harsh reality is that overall, over 10 years, total returns are nothing to get excited about. A £10,000 investment 10 years ago here is worth £9,454 today, although you have picked up £5,845 in dividend payments. Compare that to £10,000 invested in the Fundsmith Equity fund. Assuming you took capital annually to the same value of the annual HFEL dividend payment, your capital today is worth . . . £37,490! And you've withdrawn the same £5,845 over the period!! I continue to hold, and at present add, here. But once the time is right for me I intend to sell and reinvest my capital across my portfolio of global equity funds. This recent period has clearly highlighted to me the shortcomings of income investing.

[shalder] 08/10/2020 22:01

Is the last bit the perils of autocomplete or the voice of experience?;-)

[panshanger1] 08/10/2020 21:23

Japan ( which is relatively COVID light ) too I hold JPS which has been on a tear and pays a nice divorce

[panshanger1] 08/10/2020 21:20

Think the China / Asia Pacific area is likely to be where you want a decent slice of your money in the next couple of years too

[carpingtris] 08/10/2020 19:58

Maybe but >+5% Divi is a damn site more than you'd have got from any bank since 2008... might not be for growth but relatively safe and paying.. can't complain. And imo I don't think you'll see >+5% anywhere banking wise anytime soon. So long as they keep paying I'm happy to accumulate.

[lord gnome] 08/10/2020 18:43

The dividend is good here, but the capital performance has been dire across the years. It has spent ten years going nowhere.

[zac0_4] 08/10/2020 15:57

Me too. Dividend income from all my UK dividend paying trusts and shares is currently being invested here at present. Good luck.

[panshanger1] 08/10/2020 08:48

Been adding at these levels Nice diversification and trust backing the dividend

[speedsgh] 06/10/2020 11:18

Dividend Declaration - HTTPS://www.investegate.co.uk/hendersonfare-incltd--hfel-/rns/dividend-declaration/202010061111242471B/ The directors have declared the fourth interim dividend of 5.80p (five point eight pence) per ordinary share in respect of the year ending 31 August 2020. The dividend will be paid on 27 November 2020 to shareholders on the register on 30 October 2020 (the record date). The shares will be quoted ex-dividend on 29 October 2020.

[carpingtris] 28/9/2020 08:56

Thanks Masurenguy

[masurenguy] 28/9/2020 08:03

"The Board expects dividends to recover in the Asia Pacific region but stands ready to utilise the Company's revenue reserves should the need arise. Revenue reserves are shareholders' money held back to smooth distributions in times of stress and the Board feels that the current environment is an appropriate time to utilise this benefit of the closed ended structure." RNS: 25 June: 2020

[carpingtris] 27/9/2020 21:03

Anyone think the current Divi of ~7% is sustainable? Pretty good compared to everything else that's available to savers/investors.

[aleman] 27/9/2020 20:38

Even more English and Welsh regions are peaking - possibly the majority when you allow for the big testing rise between Sept 1st and 25th of 70% in England and 100%+ in Wales. The peak of wave 2 is spreading from SE to NW. It looks bad in Scotland though - cases up 400% on testing DOWN 40% in the same timeframe. Scotland does not yet look to have built up the immunity that parts of southern England seem to have. Midlands is turning down now. Allow for the 70% rise in English testing and it probably did so a few days ago. Https://coronavirus.data.gov.uk/cases?areaType=region&areaName=East%20Midlands I know it's not terribly relavent to HFEL directly but it just highlights how misleading headline case numbers in papers have been. Wave 2 everywhere in Western Europe is turning out nothing like wave 1 in hospitals. They said we were following Spain. Well Spanish hospitalisations halved in early September and now deaths look to have peaked a few weeks later. https://www.worldometers.info/coronavirus/country/spain/ Luxembourg has amongst the highest testing in the world - more than twice the UK's level - at about 1% of population each day. In the last 4 months it drew no headlines for its wave 2 where they have had 14 deaths from 5025 cases - a case mortality rate of 0.28%. Same as bad flu. (Normal UK flu range is 0.1-0.3%, usually at the lower end.) hxxps://msan.gouvernement.lu/fr/graphiques-evolution.html Luxembourg will still be missing some asymptomatic cases even at their high testing rate so the true IFR for them is more likely to be 0.2% or less. If the rate turns out to be 0.2%, then 20-25m people in the UK might have already had it. That's probably why pockets of the South hit hard in wave 1 have seen no wave 2 and it looks to be turning down in the Midlands already. The North and Scotland haven't got there yet but isolated spots are peaking up there, too, and they are growing in number. https://coronavirus.data.gov.uk/cases?areaType=ltla&areaName=Chesterfield https://coronavirus.data.gov.uk/cases?areaType=ltla&areaName=Selby This may seem optimistic. It might be, but it also explains why the US Northeast did not get it again. And Sweden, of course. I think the UK's wave 2 is turning and, although the virus will never go away completely, once Scotland and the North are done this time, Covid will just be another cold or flu bug from here. As far as affecting HFEL, some parts of Asia don't seem to have had it yet, including much of China but if it is down to flu levels now (the global total is only 5k per day out of about 160k total deaths per day - that's in bad flu territory if it does not go up again), then China and parts of Asia might not need much lock down again, like Western Europe's wave 2.

[pvb] 21/9/2020 15:51

As more local lockdowns begin, the hard truth is there's no return to 'normal' https://www.theguardian.com/commentisfree/2020/sep/21/local-lockdowns-begin-no-normal-advice-live-with-covid The only certainty about the year ahead is the uncertainty. As a scientist, here’s my advice on how we can live alongside Covid

[aleman] 09/9/2020 08:15

This is interesting for all sorts of reasons even thought not directly linked to HFEL. Seroprevalence in this part of Brasil of 40.4% suggests just about herd immunity. IFR of 0.15% (0.17% after allowance for missed deaths) is very low and same as UK seasonal flu. Cases in public figures are estimated to be underrecorded by 22 times. Peak in deaths was May so peak in infections must have been April. It suggests Brasil peaked much earlier than common figures suggested due to delays in reporting deaths and late start to testing. There's been a sharp dip in global deaths in recent days. They're running at 5k per day and falling from a total of 160k global deaths per day on average for all causes. This could signal the end of wave 2 and maybe the end altogether - except this data suggests the peak was really earlier. How many other countries actually peaked much earlier than thought? Https://www.medrxiv.org/content/10.1101/2020.08.28.20180463v1.full.pdf

[aleman] 07/9/2020 11:41

UK household infection survey's estimated infection rate for England a month ago was 3800 per day and rising. The UK is averaging 7 deaths per day now and it's flat or still possibly falling. There is similar going on in other countries. Big rises in cases - modest or no rises in deaths. Covid is now so much like average seasonal flu that I've bought half my HFEL back. Even if it does break out again in those countries in Asia that have not had it significantly yet, the death rates are looking very modest now and not worth locking down for. There are 5000+ Covid deaths globally per day and it's falling. Usually about 160k die each day from all causes. Covid might expand a bit in the autumn like a normal coronavirus but the death rate now seems to be not far out of line with a normal coronavirus. It's not just a cold yet but it's no longer looking much worse than normal flu. Hopefully that will continue, and if it does, I might buy some more HFEL.

[pvb] 05/9/2020 14:04

...Well, there are enough 'theories' there to 'explain' just about anything anyone could ever wish for! ;-)

[aleman] 04/9/2020 08:44

You'll never know what is going on following our media and the statistically naive reporting it uses to create scare stories. India is reporting 150% more daily cases than a month ago - but only because it is performing 220% more tests than a month ago. The hit rate on testing peaked at 11.9% in July 25th. It's now 7.9%, suggesting virus prevalence has fallen by a quarter since peak. If peak prevalence was on July 25th, you'd expect peak deaths to occur around the end August. If you check your second link, you'll see deaths stopped rising and have basically plateaued since the 1089 figure on August 18th. You can find hit rates on testing here: Https://ourworldindata.org/coronavirus-data-explorer?zoomToSelection=true&minPopulationFilter=1000000&year=latest&time=2020-06-01..latest&country=~IND&region=World&positiveTestRate=true&interval=smoothed&aligned=true&hideControls=true&smoothing=7&pickerMetric=location&pickerSort=asc It's taking it's time to spread across rural India and there are probably some delays in reporting rural deaths but deaths in urban areas peaked ages ago. New Delhi deaths peaked back in June. Https://timesofindia.indiatimes.com/city/delhi/fresh-covid-19-cases-in-delhi-fall-below-1000-for-1st-time-in-49-days/articleshow/77075964.cms They only have (slowly) rising new cases India due to rapid rises in the number of tests performed. As the number of new cases reported continue to increase (85k) and the number of deaths do not (under 1k), they are starting to ask questions about why the virus is not turning out as deadly as expected. This trend is being repeated in other countries. The more they test, the more cases they find that were being missed before and headline simple death rates keep falling. If testing is not stable (most places increasing or chasing hotspots), you are better off following hit rates on testing to estimate prevalence. The UK hit rate has been broadly flat for two months at around 0.6%. A doubling in testing has found a doubling in new cases. Virus prevalence has likely not risen. Given the rapid fall in deaths, and the fact that they've been opening more testing stations in hotspots, so overstating any increase, virus prevalence is more likely to have actually fallen. That would explain why UK deaths have continued to fall significantly and hospitals have continued to empty. (I'm from Bradford originally. It had 1000 cases in July but only 5 deaths in August. In August, increased testing has found 1100 cases in Bradford but there is now only 1 person in intensive care there and 9 other inpatients. Figures like that that would typically produce 1 death in the next couple of weeks so the death total looks set to fall below 5 in September. Increased testing is likely highlighting a mortality rate in Bradford of only 0.5% and falling. If you allow for the fact that Bradford is still not testing everyone and so is still probably missing most asymptomatic cases, It's quite possible that Covid mortality is no longer higher than an average seasonal flu there (0.15%). Increased testing is finding more cases than thought so recent mortality rates are turning out lower than expected, possibly even as low as flu in some places.

[aleman] 04/9/2020 08:44

They're doing something similarly naive with excess deaths. The underlying trend has been rising faster in recent years due to WWII baby boomers coming into their final years. Baseline deaths have been rising by about 7k per year. If you measure 2020 excess against only the 5 year average, you will get a higher figure than if you measure it against the more realistic rising baseline trend. Excess Covid deaths against the simple 5-year average, though technically correct, overstate the trend by about 400 deaths per week or 21k over the full year. Covid is not actually showing much higher mortality than a bad flu on current trends in excess deaths, though it is infecting lots more people than flu due to lack of previous immunity in the herd. (There is growing speculation that 50-60% of the population do seem to have some kind of immunity due to previous exposures to other coronaviruses in years gone by. If so, herd immunity might occur at only 20-30% exposure to Covid in the UK. This might explain why immigrants don't seem to fare quite as well as people that have resided in the cold-prone UK climate for many years, receiving a broader range of coronavirus exposures.).